Use the Following to Answer Question

question 332

Multiple Choice

Use the following to answer question:
-(Table: Variable Costs for Lots) Use Table: Variable Costs for Lots.During the winter,Alexa runs a snow-clearing service in a perfectly competitive industry.Assume that costs are constant in each interval;so,for example,the marginal cost of clearing each of the lots from 1 through 10 is $20.Also assume that she can only plow the quantities of the lots given in the table (and not numbers in between) .Her only fixed cost is $1,000 for a snowplow.Her variable costs include fuel,her time,and hot coffee.If the price to clear a lot is $60,how many lots should Alexa clear?

• A)50
• B)40
• C)30
• D)20

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Definitions:

Systematic Risk

The risk associated with the overall market or a specific segment of it that cannot be reduced through diversification.

Dividend

A portion of a company's earnings distributed to its shareholders, typically paid on a regular basis.

One-Year Return

The total percentage gain or loss on an investment over a one-year period, taking into account both price fluctuations and dividends or interest received.

Unsystematic Risk

Exposure to potential loss tied to a certain firm or field, reducible by varying investment portfolios.